2015

19 February, 2015 | ETNO

ETNO ThinkDigital Interview - Support entrepreneurship, reform the rules of the past

In this week’s ETNO #ThinkDigital interview, Orange’s Deputy CEO Pierre Louette discusses the digital ecosystem, start-ups and how regulation and policymaking can promote a more innovative and investment-conducive environment.

​Orange recently published a "Manifesto for digital growth" in which the first point is that the EU should promote entrepreneurs and start-ups. Orange also invited some of these start-ups on stage at a recent Brussels event. Why is entrepreneurship the focus?

There are many opportunities for cooperation between digital start-ups and bigger players within the digital economy. People are not always aware that larger companies depend on the ‘ecosystem’ which includes small, innovative start-ups and SMEs: They are dynamic and fast-moving and are great partners for supplying popular content and apps, or new technological breakthroughs. From the point of view of companies such as Orange, it is clearly very much in our interest to see such companies prosper and this is why Orange has developed a range of Open innovation programmes, from talent grooming (Orange Fab) and community building (Orange Partners) to investment (Orange Digital Ventures).

You underline that innovation is fundamental to Europe's future. How can new EU policies support this?

Firstly, Innovation is nurtured in an environment favourable to private initiatives and investment: For this reason, regulation should not create barriers to innovation nor affect the diffusion of technology – for example, when one ties regulation to a particular technology, or when it is imposed too early in the process. Technology always needs a continuous flow of investment. This is especially true in such an open world as the digital market, where barriers to innovation are a handicap primarily to European players, while competition is global. Investment really is essential: without investment and high quality networks, consumers and businesses will not fully benefit from innovation.

Secondly, from our experience, I see that innovation best develops in an open ecosystem. Collaborative cooperation between players of all kinds benefits the whole ecosystem and, ultimately, users and consumers. If we are to develop a “single market for innovation”, we should ensure that public policies do not restrict some branches of the industrial economy as opposed to others.

Do you think technological innovation could be compatible with the restrictive net neutrality rules that the EU might put on the table?

We strongly believe in an open internet. Operators have been investing and continue to invest to sustain the best access to the internet for their customers; this is our core business. European rules should be balanced: preserving customer choice while promoting innovative services by European players and investment in broadband networks. Rules should allow operators to efficiently manage their networks and develop new business models between operators and providers. Neutrality is good and investment along with innovation are certainly what our customers expect. Moreover, neutrality should not stop at networks: to guarantee an open internet, policy-makers should ensure neutrality is preserved across the entire digital value chain.

Orange's CEO Richard recently remarked that "blocking consolidation in Europe" would be a historical mistake. Why?

Consolidation is needed in Europe, especially to produce the level of infrastructure investment that Europe needs. A competitive market with fewer players that can invest more will be more efficient than a market with many players which are unable to sustain a high level of investment. We should not forget that investment in efficient technologies such as 4G or fibre are the drivers for increasing usage at lower prices.

The European Commission might soon start a review of the 2009 Telecoms Framework. How will this affect future investment decisions of your company?

This review will be decisive for investment, of course! The current framework has been good at facilitating market entries but has become obsolete. It was designed at a time of internet infancy, when infrastructure competition was low and is no longer adapted to the competitive and converging landscape now at play in the EU or to the current investment challenges. This is why we need a thorough review and a simplified, more modern framework, both on network and services regulation. Most of all, investment has to rank as a top priority in this future framework! The debate – to which Orange is an active contributor - is key for the EU telco industry, and essential for the European economy. We sincerely hope that the Digital single market package which the European Commission is currently working on will deliver the modernisation we need to unlock investment and restore growth and EU leadership.

Cloud is revolutionising the way in which individuals, SMEs and big companies work. What can be done, from a policy viewpoint, to support it?

We see that customer requisites in terms of cloud services cover a wide range of options, from low price to higher security that will be addressed by a multi-layered variety of providers, whether local, global, big or small. In this context, there will be hybrid clouds mixing or merging with other clouds of different origins, each one accommodating different data types and security requirements. Policy initiatives and regulation need to take this necessary diversity and its implications into account and leave room for cloud infrastructure investment in Europe as well as for smaller providers to be born and grow in Europe.